Disney plans to freeze targeted hiring as well as cut some jobs, according to an internal memo sent to executives.
“We are limiting additions through a targeted hiring freeze,” Chief Executive Officer Bob Chapek said in a memo to department heads sent on Friday and obtained by CNBC. get. “Hiring for a small group of the most critical, business-oriented positions will continue, but all other roles are on hold. Your segment leaders and HR teams will have more. specific details on how this will apply to your teams.”
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He added: “As we go through this review process, we’ll be looking at every activity and labor to find savings, and we anticipate cutting some staff as part of the plan. this review.” Disney has about 190,000 employees.
Chapek also told executives that business travel should be limited to essential trips. He wrote in the memo that meetings should be conducted virtual as much as possible.
Disney is also forming a “cost structure task force” that includes Chief Financial Officer Christine McCarthy, General Counsel Horacio Gutierrez and Chapek.
“I am fully aware this will be a difficult process for many of you and your team,” Chapek wrote. “We’re going to have to make difficult and uncomfortable decisions. But that’s just what the leadership asked for, and I thank you in advance for your guidance during this critical time.”
The moves come after Disney reports Disappointing quarterly results. The company’s shares fell sharply on Wednesday, hitting a new 52-week low, before rebounding at the end of the week.
McCarthy said during Disney’s earnings press conference Tuesday that the company is looking to cut costs.
“We’re currently actively evaluating our cost base, and we’re looking for meaningful effects,” she said. “Some of them will provide some short-term savings, and others will provide more long-term structural benefits.”
Disney streaming services lost $1.47 billion last quarter, more than double the unit’s loss from a year ago. McCarthy said losses will improve in 2023, and Chapek has promised that streaming will be profitable by the end of 2024.
Other major media and entertainment companies, including Discovery of Warner Bros. and Netflix, has cut jobs this year as valuations have fallen. Disney has not announced any plans to eliminate jobs.
The full memo can be read here:
Disney leaders-
As we begin fiscal 2023, I wanted to talk directly with you about the expense management efforts that Christine McCarthy and I referenced during this week’s earnings call. These efforts will help us both achieve our important goal of achieving profitability for Disney+ by fiscal 2024, and help us become a more efficient and agile company overall. This work is happening amid the economic uncertainty facing all of our companies and industries.
While some macroeconomic factors are beyond our control, achieving these goals requires all of us to continue to do our part to manage the things we have. controllable — most notably, our costs. You will all have important roles to play in this effort, and as senior leaders, I know you will do a great job.
Just to be clear, I’m confident in our ability to achieve our goals and the management team will get us there.
To help guide us on this journey, I have formed a cost structure task force made up of executive officers: our CFO, Christine McCarthy, and General Counsel, Horacio Gutierrez. Together with me, this team will make the key picture decisions needed to achieve our goals.
We didn’t start this work from scratch and have already set a number of next steps — which I want you to hear directly from me.
First, we did a rigorous review of the company’s content and marketing spend while working with our content leaders and their teams. While we won’t sacrifice the quality or power of our unrivaled compositor, we must ensure our investments are both productive and deliver concrete benefits to both our audience and company.
Second, we are limiting the addition of staff through a targeted hiring freeze. Hiring for a small group of the most important, business-driven positions will continue, but all other roles are on hold. Your segment leaders and HR teams have more specific insights into how this will apply to your teams.
Third, we are reviewing our SG&A and have determined that there is a potential for efficiency improvement — as well as an opportunity to transform the organization into more agile. The task force will advance this work in partnership with segmentation groups to achieve both savings and organizational enhancement. As we go through this review, we’ll look at every activity and labor to find savings, and we anticipate cutting some staff as part of this assessment. In the short term, business travel should be limited to essential trips. In-person or off-site meetings that require travel will require prior approval and review from a member of your executive team (i.e. reporting directly to the division president or chief executive officer). corporate governance). As much as possible, these meetings should be conducted virtual. Attendance to conferences and other external events will also be restricted and approval is required from a member of your executive team.
Our transition is designed to ensure we thrive not only today but also into the future—and you’ll get more information from our task force in the weeks and months ahead. next month.
I fully know that this will be a difficult process for many of you and your team. We will have to make difficult and uncomfortable decisions. But that’s just what the leadership asked for, and I thank you in advance for your push during this critical time. Our company has overcome many challenges throughout its 100-year history, and I am sure we will achieve our goals and create a more agile company that is more in tune with the environment. school of tomorrow.
Thank you again for your leadership.
-Bob
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